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How to handle a product recall

Knowing what to do in a food-safety crisis can make all the difference between chaos and consumer confidence. Here are the top five things to do when a recall is announced.

1. Check your insurance policy. But do it now, before the next recall is announced, advises Ken Odza, a Seattle-based attorney with Stoel Rives, LLP, which specializes in food-liability law. Some states exempt retailers from liability if the tainted product is packaged, but if it's sold in bulk or if your supplier doesn't have deep enough pockets, "you're going to be on the hook," Odza says. "What you need to do is have very good agreements with your providers to make sure they're providing indemnity—insurance against any claims as a result of their product."

2. Pull product first, ask questions later. "We don't always know where vendors get their raw materials, so we'll pull a product until we've confirmed it doesn't use the recalled raw materials," says Susan Stewart, organic certification coordinator at the Wedge Community Co-op in Minneapolis. "Everything sits in a kind of quarantine until we know for sure." You may have to do some gumshoe work yourself. "In the case of bulk peanuts, our distributor was not sure of the source, so while they were looking, we were, too. We just go right to the producer," Stewart says.

3. Communicate quickly and thoroughly. "Litigation occurs when customers receive contradictory or late information from a store that they trust, and they feel betrayed," Odza says. That's why Tom Becker, an executive at Sitrick and Co., a New York-based strategic-communications firm, recommends that retailers "go out of their way to make sure customers are not only aware of the recall, but also have all the pertinent facts, including potential risks and refunds." Make information available via educated staff members, in-store signs, shopping bag inserts, a toll-free hotline and on the store's Web site. "Customers need to feel the retailer is taking the extra step to protect the health and well-being of their customers, even at the cost of profits," Becker says.

Stores with a loyalty program have an additional leg up. "With our point-of-sale system, we can track everything that's gone out the door by just scanning the UPC code," Stewart says. "For our members, we have the capability to call everyone and tell them to bring the product back for full store credit."

4. Remove shelf tags. A simple but often overlooked step, this prevents buyers from inadvertently ordering more product before the recall has been resolved.

5. Follow up. "Customers will respond positively if they believe they are part of the solution," Becker says. This can range from the store manager mingling with customers and asking how they felt about the store's efforts to deal with the recall, to providing coupons or free products to shoppers in exchange for completing in-store or online surveys about the store's response. "It is important to learn what worked and what didn't," Becker says.

Writer Laurie Budgar removes products from her fridge every six months, whether they're moldy or not.

Did you know?

> All recalls are voluntary, and can be initiated by a food manufacturer or retailer. For FDA guidance on conducting recalls; go to fda.gov/ora/compliance_ref/recalls/ggp_recall.htm.

> The spinach outbreak of 2006 resulted in more than $200 million paid out by people in the supply chain—including retailers.

> Consumers rarely change their habits in response to food scares. According to a recent poll by market-research firm NPD Group, 69 percent of adults said they were "concerned about" mercury in seafood, but only about 20 percent planned to eat less fish. —L.B.